It’s tax season. Even as a money writer, tax procrastination is real. I managed to get mine done early this year by adding “file taxes” to my to-do list along with grabbing the ingredients for a Cheesecake Factory cajun pasta dupe I’ve been dying to try. If you haven’t found the time (or will) to do your taxes, try romanticizing it, too. Think: Making a mocktail (vs a cocktail, you know, to minimize the risk of making a mistake) or grabbing an inflation-proof snack.
— Dae Cason / Money Writer / Columbia, SC
How the news affects your finances.
Boost Your Tax Refund
Let’s be real, when you’re looking forward to a refund, Tax Day becomes Tax Yay. This year, the typical refund (so far) is just over $3,000, which is up about 4% from last year. Whether you’re finishing up filing or thinking about strategies for next year, there are lots of ways to ensure you get the maximum refund possible. So how can you make sure more $$$ hits your bank account courtesy of the IRS? Spoiler: It’s all about lowering your taxable income. Here are three ways to do just that.
Your move:
Add $$$ to tax-advantaged accounts. You can contribute to your IRA and your HSA up until Tax Day, which may help lower your tax bill (hint: read the IRS’s fine print here and here). Next year, consider maxing out your 401(k) and FSA to further reduce what you owe to the IRS. Reminder: The deadline to make contributions to these accounts is Dec 31.
Claim any credits you’re eligible for. A credit is subtracted from any taxes you owe, reducing your overall bill. Three common ones: The child tax credit, which is up to $2,000 per qualifying child, a home improvement credit of up to $3,200 for energy-efficient home improvements, and an EV tax credit of up to $7,500 for the purchase of a new electric vehicle.
Deduct, deduct, deduct. When you file your taxes, you can either claim the standard deduction or itemize. While it’s more time-consuming to itemize, you might save more money. Some popular deductions: Student loan interest, home mortgage interest, and charitable donations. Also worth noting: If you’ve had a $$$ year of medical bills, you may also be able to deduct those expenses.
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Already filed your taxes?
Here’s when you can expect to get your refund.
Everyone wants to avoid tax penalties…
One thing that can help: Knowing your “tax milestone birthdays.”
Feeling overwhelmed with your tax prep?
Use these pro tips to avoid common mistakes.
Can HSA or FSA dollars cover your gym membership?
The IRS says ‘no,’ even if you have a doctor’s note.
If you live in Florida, Texas, California, or New York…
You may be able to file your taxes for free and directly to the IRS.
PS: Residents in eight other states are eligible, too.
The Wall Street trends to know this week.
Tech is leading a market rebound. Nvidia’s shares are up as the company kicks off its annual conference, where the chipmaker is expected to reveal its latest AI advancements. Alphabet and Apple stocks are up, too, after reports that the tech companies are in talks to roll out Google-powered AI features in iPhones.
One act of financial self-care you can do in five minutes.
Adjust your W-4 form.
Opting to have more money taken out of your paycheck now generally means a bigger tax refund later. But it also means the IRS holds onto that cash. Cash that could otherwise be growing in a savings or investment account. While a bigger paycheck now probably means a smaller (or maybe no) refund later, in many cases, the trade-off is worth it. Before you make changes to your W-4, reach out to a tax pro to make sure you aren’t underpaying, because that comes with penalties.
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